Data centers have become one of the most capital-intensive areas of real estate, attracting significant institutional investment. But not all investors are approaching the sector in the same way. Josh Pristaw, president and managing director at Clarion Partners, outlines why the firm remains focused on other sectors with durable, long-term cash flow characteristics and how that shapes its view on data centers. He also discusses where capital is flowing, how returns may evolve as new supply comes online and why the sector presents challenges for core, open-end strategies.
Data centers have attracted significant institutional capital in recent years, but Clarion has chosen to direct its attention to other sectors. Why is that?
In general, we are very focused on assets with long-term demographic or secular tailwinds. That is because we overwhelmingly manage evergreen, open-end funds. Our business plan is not buy, fix and flip. We are looking for assets wi
